The Payment for Ecosystem Services: Developing Forest Carbon Projects in Nepal case study presents basic carbon deal considerations in the Nepalese context, specifically using Community Forest User Groups (CFUGs) in Dolakha as a tangible example of how forest carbon credits and payment for other ecosystem services (biodiversity, water, soil quality, etc.) could be pursued. Developed by EnterpriseWorks/VITA in partnership with Terra Global Capital and the Asia Network for Sustainable Agriculture and Bioresources (ANSAB) the case was published in May 2009.

Carbon markets, in particular the ones involving carbon credits from forest-based projects, continue to evolve. While much has been written about the potential for forest-based carbon deals, identification of specific cases compared to current carbon market requirements has yet to be documented in Nepal. Nepal, with its declining forest cover, yet strong history of community forestry, has significant potential to implement forest carbon projects.

This case study identifies the potential for forest carbon projects in Nepal; summarizes the eligibility requirements under the various carbon markets and registries – Voluntary Carbon Standard (VCS), Clean Development Mechanism (CDM, and Climate, Community and Biodiversity Alliance (CCBA); and provides a specific case example from Dolakha District in Nepal. The case study documents field work carried out with the Nepal stakeholders in February 2009 and a workshop held on February 16, 2009 in Kathmandu – “Forest Carbon in Nepal: Where Community Development and Conservation Meet – Payment for Ecosystem Services”. The PowerPoint presentation from the workshop and the case study are available for download. The case study and workshop presentation have been supported by the Translink Program funded by the United States Agency for International Development (USAID).